FTSE slips as miner weakness offsets M&A support

* FTSE 100 down 0.1 percent

* M&A activity lifts BG Group, Dana

* Index close to significant technical support levels

By Simon Falush

LONDON, Aug 20 (BestGrowthStock) – Britain’s top share index inched
lower early on Friday, as weakness from miners offset strength
from BG Group (BG.L: ), which was lifted by M&A speculation.

By 0824 GMT the FTSE 100 (.FTSE: ) was down 6.35 points or 0.1
percent at 5,204.94 after it ended 1.7 percent lower on
Thursday, its lowest close since July 20.

BG Group (BG.L: ) was the biggest riser, with traders pointing
to the Daily Mail’s market report which notes speculation that
Royal Dutch Shell (RDSa.L: ) is considering a takeover bid of the
gas producer. [ID:nLDE67J0AE]

Among midcaps, Dana Petroleum (DNX.L: ) added 5.6 percent
after State-run Korea National Oil Corp (KNOC) made a hostile
$2.9 billion cash bid for the company.

“We are having one of the busiest M&A months of August for a
very long time as companies have got a lot of cash that they
don’t know what to do with,” said David Buik, senior partner at
BGC Partners.

“The takeover activity is underpinning the market, because
as soon as anything looks good value, people are looking to buy
it up.”

Cairn Energy (CNE.L: ), also involved in M&A activity, added
1.9 percent.

India’s oil minister Murli Deora said his ministry has
sought details on the proposed acquisition of a majority stake
by Vedanta (VED.L: ) in Cairn India (CAIL.BO: ), the local arm of
Britain’s Cairn Energy. Vedanta fell 1.5 percent.

But BP (BP.L: ) fell 1.6 percent after the troubled oil major
said on Thursday that it was not likely to put the final plug in
its blown out Gulf of Mexico oil well until September.
[ID:nN1998215]

The overall tenor of the market was downbeat as investors
fretted about a rather gloomy macroeconomic backdrop.

U.S. stocks (Read more about the stock market today. ) tumbled to their lowest close in nearly a month
on Thursday, while Japan’s Nikkei 225 (.N225: ) fell 2 percent on
Friday, after data showed new U.S. jobless claims scaled a
nine-month high last week and Mid Atlantic manufacturing shrank
in August for the first time in more than a year.
[ID:nN19350083]

The FTSE continues to trade within a sideways range between
support at 5,200 and resistance at 5,276, said Raghee Horner,
chief market analyst at Autochartist.

“If the current range is to remain intact going into the
weekend, the FTSE will have to rally higher and retrace the
dramatic move lower from 5,336 to 5,205 that was seen on
Thursday,” she said, adding that if the index stays above 5,200
a move higher to 5,300 is likely.

Eurasian Natural Resources (ENRC.L: ) was the top blue-chip
faller, down 2.5 percent after Citigroup cut the stock to “hold”
from “buy”.

Other miners were also weaker, tracking a softer metal
price. Xstrata (XTA.L: ) fell 2 percent while Kazakhmys lost 3
percent.
(Editing by Jon Loades-Carter)

FTSE slips as miner weakness offsets M&A support